Cashfree Explained

Cashfree (also known as Cashfree Payments) is an Indian payment service provider. It provides payment solutions via APIs for platform businesses like crowdfunding portals, online marketplaces, and small business software companies. Additionally, it offers fraud and risk protection through bank account verification.^[2]

History

Cashfree Payments, founded in 2015 by Akash Sinha and Reeju Datta, initially focused on creating a payments solution for offline restaurants in the city of Bangalore.^[3]

In 2016, the company pivoted to become a broader payment solutions provider, developing an API-based payments platform that enabled businesses to accept payments and make bulk payouts efficiently.^[4] By 2017, it expanded further by launching a payout product, allowing businesses to disburse bulk payments to vendors and customers.^[5]

In December 2023, India's Reserve Bank of India (RBI) awarded payment aggregator license to the company^[6] and in July 2024, it became the first non-bank to receive the cross-border payment aggregator export and import license in India.^{[7] [8]} In October 2024, Cashfree Payments received certification from the National Payments Corporation of India for its Unified Payments Interface switch service,^[9] and in the same month, it was granted a prepaid payment instrument license by the RBI.^{[10] [11]}

Funding

The company has investors including Silicon Valley's Y Combinator, Apis Partners, and the State Bank of India.^{[12] [13]}

Financials

In FY 2022-23, Cashfree Payments' operating revenue increased to from the previous year, while its net loss grew to from ₹2.9 crore. Total revenue grew to crore, driven by commission income and merchant setup fees, but expenses more than doubled to, largely due to employee benefit costs.

Controversies

• In September 2022, the Enforcement Directorate conducted raids at the company's premises in Bangalore, along with Easebuzz, Razorpay, and Paytm, investigating alleged irregularities in the operations of instant app-based loan providers supposedly 'controlled' by Chinese-controlled entities and individuals.^{[14] [15] [16]} The raids were carried out under the Prevention of Money Laundering Act, 2002.^[17] During the search, was discovered in the virtual accounts of entities associated with Cashfree.^{[18] [19]} Additionally, was found with Easebuzz in Pune; with Razorpay in Bengaluru; and with Paytm in New Delhi.^[20]
• In December 2022, the RBI banned Cashfree along with Razorpay, PayU and Paytm from onboarding new merchants.^[21] This was due to concerns about their practices, though the exact reasons haven't been made public. After a year-long ban, Cashfree announced the lifting of the restriction, citing enhancements in their operational processes.^{[22] [23]}

Further reading

• News: Ghosh . Debangana . 4 June 2022 . Cashfree Payments to expand to 15-18 countries over next 2 years . 3 October 2024 . The Hindu Business Line.
• News: 10 September 2022 . Illegal loan apps: FM orders action; RBI to make 'white list' . 9 October 2024 . The Indian Express.
• News: Soni . Yatin . Sureban . Haripriya . 17 January 2023 . Cashfree Payments lays off employees across functions . 3 October 2024 . The Hindu Business Line.
• Book: P. Lama, Mahendra . https://link.springer.com/chapter/10.1007/978-981-99-4326-5_9 . India-China Dialogues Beyond Borders . 26 December 2023 . . 2023 . 978-981-99-4326-5 . Mishra . Swati . 77–115 . Understanding India’s China Dependence Syndrome . 10.1007/978-981-99-4326-5 . Sheel . Ranjana.
• News: Banthia . Jyoti . 22 March 2024 . Post PA licence, Cashfree Payments' transaction volumes have increased by 30% . 3 October 2024 . The Hindu Business Line.
• News: Mathew . George . 28 July 2024 . Split & pay taking off: Combine payment methods for seamless high-value bills . 3 October 2024 . The Indian Express.

Notes and References

1. News: Singh . Arti . Cashfree targeting return to profitability by Q1FY25: CEO. 18 January 2023 . Mint (newspaper).
2. News: Kawale . Ajinkya . 21 March 2024 . Cashfree Payments launches product solution to cut fraudulent transactions . 3 October 2024 . Business Standard.
3. Web site: Sarkar . Pooja . 11 February 2021 . Akash Sinha: Banking On The Digital Wave . 3 October 2024 . . en.
4. Web site: 2024-01-13 . Cashfree Payments' net loss widens to ₹133.1 cr in FY23 . 2024-10-03 . . en.
5. News: Behera . Nirmalya . 6 November 2017 . Cashfree: Easing multiple bank transfers . 3 October 2024 . Business Standard.
6. Web site: Kayastha . Anshika . 2023-12-20 . After a year of waiting, RBI grants at least six payment aggregator licences . 2024-10-03 . . en.
7. Web site: 19 September 2024 . Approvals and Certificates of Authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 for Setting up and Operating Payment System in India . 3 October 2024 . Reserve Bank of India.
8. Web site: Pushkarna . Akshit . 2024-07-22 . Cashfree Becomes First Entity To Get Cross Border PA Licence From RBI . 2024-10-09 . Inc42 Media . en.
9. News: 2024-10-15 . Cashfree receives NPCI certification for its own UPI switch . 2024-11-14 . The Economic Times . 0013-0389.
10. News: Kawale . Ajinkya . 29 October 2024 . Cashfree Payments gains regulatory approval to operate as a PPI provider . 14 November 2024 . Business Standard.
11. News: 2024-10-29 . Cashfree Payments receives prepaid payment instrument licence from RBI . 2024-11-14 . The Economic Times . 0013-0389.
12. Web site: Kannan . Uma . 2024-04-30 . Payment aggregator essential for internet economy: Cashfree CEO . 2024-10-03 . . en.
13. Web site: 2022-06-30 . Payments startup Cashfree eyes fresh funding . 2024-10-03 . . en.
14. Web site: 2022-09-16 . ED seizes ₹46.67 cr belonging to Paytm, Easebuzz, Razorpay and Cashfree under PMLA . 2024-10-03 . . en.
15. Web site: 2022-09-03 . Chinese loan apps probe: ED raids Paytm, Razorpay, Cashfree premises . 2024-10-03 . . en.
16. News: Ahmed . Aftab . Vengattil . Munsif . Mallard . William . India agency searches payment firms in Chinese lending probe . 2024-10-03 . . en-US.
17. Web site: 2022-09-04 . Chinese loan app PMLA case: ED raids Razorpay, Paytm, Cashfree in Bengaluru . 2024-11-14 . Financialexpress . en.
18. Web site: ANI . 2022-09-16 . ED freezes RS 46 cr worth funds of Easebuzz, Razorpay, Cashfree, Paytm in Chinese loan app case . 2024-10-09 . ThePrint . en-US.
19. Web site: PTI . 2022-09-16 . Chinese loan apps: ED freezes Rs 46 cr worth funds in Paytm, Razorpay & two others . 2024-10-09 . The News Minute . en.
20. News: 16 September 2022 . Chinese loan apps: ED freezes Rs 46 cr kept in payment gateway accounts . 3 October 2024 . Business Standard.
21. Web site: Kayastha . Anshika . 2022-12-16 . RBI asks RazorPay, Cashfree Payments to pause on-boarding new merchants . 2024-10-03 . . en.
22. News: Singh . Arti . 19 December 2023 . RBI lifts ban on Razorpay, Cashfree; allows onboarding new merchants . 3 October 2024 . Mint (newspaper).
23. News: Sinha . Vaishnawi . 19 December 2023 . Ban on Razorpay, Cashfree lifted; RBI gives nod to onboard online payment merchants . 3 October 2024 . Hindustan Times.